Investigation on Homeowner Association Foreclosure FilingsThe law firm of Peters and Freedman with offices in Encinitas and Palm Desert, California, claim to represent several hundred homeowner associations. A number of homeowners have been investigating some of the practices of this law firm, especially when they conducted foreclosure sales on behalf of homeowner associations. The following information is preliminary and AHRC will bring additional information as it becomes available.

San Diego, California - The law firm of Peters and Freedman with offices in Encinitas and Palm Desert, California, claim to represent several hundred homeowner associations. A number of homeowners have been investigating some of the practices of this law firm, especially when they conducted foreclosure sales on behalf of homeowner associations. The following information is preliminary and AHRC will bring additional information as it becomes available.

The first 4 cases were quiet title cases brought by Sosa after he acquired the properties in foreclosures conducted by Peters and Freedman. The fifth case deals with a homeowner who sued to get her home back after she discovered that it had been bought by Carlos Sosa in a foreclosure handled by Peters and Freedman.

Each foreclosure has the following in common.

1. The foreclosure sale was handled by David Peters of Peters and Freedman.

2. The notice of foreclosure sale was posted in a publication called Uptown Examiner. It has a circulation of approximately 165.

3. Each home was sold to the same attorney, Carlos Sosa.

4. The homes were sold at foreclosure for amounts ranging from $1400 to $7,000. The equity in each home was estimated to be between $150,000 to $300,000.

The homeowners who are investigating these cases claim that there were both improprieties and outright violations of the law.

1. They claim that it is at least improper for the homeowner association lawyers to handle the foreclosure sale on behalf of the association. The entity conducting the foreclosure sale is supposed to be a neutral third party.

2. The investigation showed in these 5 cases that the publication of the notice of sale violated Civil Code Sec. 2924(f). That section requires "publishing a copy once a week for 3 consecutive calendar weeks". The investigators claim that the notice of sale may have been published 3 times, but not for "3 consecutive calendar weeks". Foreclosure provisions are interpreted strictly in the law.

3. The Rules of Professional Conduct of the California State Bar prohibit a member lawyer from purchasing a property from a lawyer with whom he has a "personal, business or professional relationship". The rule states:

" Rule 4-300. Purchasing Property at a Foreclosure or a Sale Subject to Judicial Review.

(A) A member shall not directly or indirectly purchase a property at a probate, foreclosure, receiver's, trustee's, or judicial sale in an action or proceeding in which such member or any lawyer affiliated by reason of personal, business, or professional relationship with that member or with that member's law firm is acting as a lawyer for a party or as executor, receiver, trustee, administrator, guardian, or conservator."

A homeowner claims to have evidence that Peters and Sosa had a business relationship. AHRC will publish more information if it becomes available.

George Harder from the Carlos Sosa v George Harder case claims that there is a connection between Sosa and the law firm of Peters and Freedman. Harder says that the property tax bill for his property did not go to Sosa but to Peters and Freedman. Harder says that all his personal property was moved out of his home by a moving company, and the moving bill went to Peters and Freedman. Harder alleges that his home was rented out by Peters and Freedman.

At a deposition of Carlos Sosa, Sosa stated that he never kept his bank statements beyond one month, and therefore had no recollection of whether any payments were made to or from Peters and Freedman. The investigating homeowners found a refund payment from Peters and Freedman to Sosa after one foreclosure sale.

Court documents in the Colburn v Carlos Sosa, Peters and Freedman et al. case, show that Sosa admitted bidding $6,500 for Melissa Colburn's home at the foreclosure sale. Sosa then stated that Peters and Freedman told him that he had paid too much, and sent him a refund check of $1,349.85. Sosa thus paid only $5,150.15 for the house.

4. The investigating homeowners have unearthed from public records a list of 57 homeowner associations in San Diego County alone, for whom Peters and Freedman have filed Notices of Trustee Sale for homes in these associations. The homeowners claim that the list of homeowner associations are ones in which Peters and Freedman had not met the publishing statute. If this is true, the affected homeowners may be entitled to restitution from their homeowner associations.

5. The investigating homeowners claim that they have found evidence of 1000's of liens filed by Peters and Freedman in at least San Diego, Orange and Riverside counties. Industry sources state that the typical attorney fee for filing a lien is about $300, and another couple of hundred dollars to take the lien off. Recording and filing fees are extra. A 100 such transactions in one month would produce a revenue of $50,000 a month in legal fees for a law firm. David Peters is reported to live in a home in Rancho Santa Fe, worth approximately $4,500,000.